US iPhone ready to be tied down?

The latest iPhone OS has options to enable tethering, not to mention a custom-dictionary editor and a control to stop the screen spinning around every time you lie down.

The next version of Apple's iPhone OS is now in its fourth beta, and the interwebs are thrilled to see that it appears possible to use an iPhone as a GSM modem - though one shouldn't get too excited given the same feature appeared, and disappeared, during testing of the last OS version.

iPhone tethering - connecting a laptop to an iPhone for internet access - has been promised to Americans, and delivered to everyone else, for years. The option appeared in beta versions of iPhone OS 3 only to vanish again before general launch, as C-Net reminds us, but now it's back with a dialog prompting customers to contact AT&T to enable tethering.

Needless to say no other smartphone platforms have any problem with tethering, and most feature phones can do it these days too.

The problem isn't technical - the iPhone is perfectly capable of routing internet traffic - but in the USA AT&T is reluctant to let punters connect laptops over their unlimited-data iPhone tariffs. Introducing a "tethering fee" is the obvious solution, and that's what O2 et al do in the UK where tethering is encouraged.

However, AT&T seems concerned that charging punters more would make the company look bad, so the best option is to keep promising and never deliver.

Kowtowing to AT&T's preferences is the price Apple has to pay for the subsidy AT&T provides. Last week Engadget reminded us that Apple and AT&T signed a five-year deal back in 2007, so if that's not been updated since then AT&T could be calling the shots for another two years and tethering in the US could continue to be the promised feature that never arrives. ®